Share tips and stock recommendations for the Australian (ASX) share market – buy, hold, and sell.

Michael Gable is an expert guest commentator for the stock market newsletter thebull.com.au.

This post is an extract from the newsletter dated 20 January 2020. You can access the full version of the article HERE.

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Buy Recommendations

ASX:SFR

We believe that global growth will recover from here and the copper price should rise with it as well. Sandfire is an Australian copper producer and its share price action suggests to us that it will start to rally from current levels. From a charting point of view, we can see potential for it to head towards $8.

ASX:ALL

Aristocrat is a gaming machine company that has generated consistently strong earnings growth over the years. Its share price profile is very stable and it looks as though this uptrend in the share price should continue. Any slight dips in the share price are a buying opportunity.

Hold Recommendations

ASX:GXY

We have avoided lithium stocks for the last two years but at the start of the year we noticed that a low was in place for Orocobre, a lithium producer. Orocobre has already run fairly hard, but Galaxy, another lithium producer, now seems to be having its turn to move and it should therefore have further upside from here.

ASX:FXL

During the last year, we have seen FXL make very large moves in a short space of time before spending a few months easing back on lower volumes. During the months of October – December, we saw FXL undergo another one of these lengthy consolidations. Now, however, it appears to be concluding this consolidation and readying itself for another run which means it should now surpass last year’s high.

Sell Recommendations

ASX:QBE

The insurer’s share price has massively underperformed the share market since the GFC. The last few years has seen it trade in a range between about $10 and $14. It is now at the top of that range, and with the uncertainty around bushfires, it might be best to get out of it up here.

ASX:CIP

This REIT is one that we have already taken profits on. The share price looks extended on the chart and it is now trading at a very large premium to NTA. The other thing investors need to keep in mind is that rising bond yields will hurt the share prices of REITs, and we have already started to see some moves higher in these yields.

 

Michael Gable is managing director of Fairmont Equities.

 

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